Cairn India, along with its partners Ravva Oil, Oil and Natural Gas Corporation (ONGC) and Videocon Industries, plans to invest about Rs 530 crore (Rs 5.3 billion) in new wells, which would help boost production from its Ravva field.
As of September, the Ravva field produced 23,000 barrels of oil per day, along with 1.5 million cubic metres of gas per day, a sharp decline from the peak production of 50,000 barrels of oil a day and two million cubic metres of gas a day in 2004-05.
This week, while announcing its results for the quarter ended September, Cairn India said in the Ravva field, a "high-value, high-risk" prospect had been identified, and exploratory well drilling here was scheduled for the first half of 2013-14.
"We plan to drill these wells and begin production by the end of 2013. The joint venture estimates this high-risk, high-reward drilling campaign may open up about 350 billion cubic feet of recoverable gas," said a source privy to the development.
The drilling programme would include both exploration and appraisal wells to delineate prospects before drilling three development wells. Sources said the operating committee had approved the proposal to drill an exploratory well and two contingent appraisal wells.
They added the joint venture would need a rig that could drill "high temperature, high-pressure" wells at water depths of up to 20 metres. The exploration could take about four months.
Between 1984 and 1988, ONGC had drilled seven wells at these depths. However, it didn't develop the prospects.
The Ravva joint venture is likely to hire a jack-up rig for the drilling programme, expected to begin in first half of the next financial year. The programme is expected to yield an impressive 32 per cent internal rate of return for the full field life, or until 2022-23.
Sources said the development plan would be finalised after the exploration and appraisal wells were drilled and the results analysed.
Officials of the joint venture said they were confident of the field's considerable remaining reserve potential and of producing more oil from the block.
Cairn India holds 22.5 per cent stake in the Ravva field, while Ravva Oil holds 12.5 per cent and Videocon and ONGC hold 25 per cent and 40 per cent, respectively. The production sharing contract between them is valid until 2019.
The Ravva field, operational for 17 years, was originally estimated to produce 101 million barrels of crude oil. However, so far, the field has produced about 249 million barrels of crude oil and sold 310 billion cubic feet of gas.
